Effect of Compensation on Employee Job Performance of Deposit Money Banks in Kano State, Nigeria

Abstract

This study examines the effect of compensation (measured by financial and non-financial compensation) on employees’ job performance at Deposit Money Banks (DMBs) in Kano State, Nigeria. The study adopted a survey research design. The population used for the study comprised 1382 out of which a sample size of 372 (including the attrition rate) was determined using Yamane's (1967) sample sizes determination formula and a convenient sampling technique was used to select the respondents. The study utilized an adapted questionnaire as the instrument for data collection. The data collected for the study were analyzed using Partial Least Square Structural Equation Modeling (PLS-SEM) in determining the measurement, structural models and hypotheses testing through SmartPLS 3.0 software. The study found that financial compensation has a positive and significant effect on employee job performance, while nonfinancial compensation has a positive but insignificant effect on employee job performance of DMBs in Kano State, Nigeria. The study concludes that compensation influences employees’ job performance at Deposit Money Banks (DMBs) in Kano State, Nigeria. It is therefore recommended that the management of DMBs in Kano State, Nigeria should continue to maintain their financial compensation practice to their employees by way of making prompt payment of all the financial entitlement of their staff and ensure proper management of payroll to gain employees' commitment to their jobs. The management of DMBs in Kano State, Nigeria should also pay attention to all non-financial compensation such as leaves, good working environment, welfare etc to their employees to motivate them to stay and be committed to their jobs.